Supreme Court Declines Review of Joint Employer Case

January 12, 2018

The U.S. Supreme Court, without comment, declined to review a radical Fourth Circuit Court test for who is a joint employer under the Fair Labor Standards Act, underlining the importance of Congress replacing the plethora of federal appellate court tests with a reasonable uniform federal standard. In the case involving DirecTV, the Fourth Circuit essentially held that to avoid joint employer status under the FLSA, two companies have to be "completely disassociated," which is determined by whether they "share, agree to allocate responsibility for, or otherwise co-determine—formally or informally, directly or indirectly—the essential terms and conditions of the worker's employment." HR Policy had previously joined with other business groups in urging the high court to overturn the Fourth Circuit's standard, citing its potential "to penalize and deter economically sensible business arrangements" between general contractors and subcontractors. The Supreme Court’s decision makes it critically important for the Senate to take up the HR Policy-supported Save Local Business Act (H.R. 3441), which would clarify the definition of "joint employer" under the FLSA and NLRA. In December, the House passed H.R. 3441 on a bipartisan vote of 242 to 181, with 8 Democrats voting for the measure.